P3.11 Consolidation of Variable Interest Entities GM Financial, General Motors Company's financ- ing segment, has special purpose entiies that are consolidated in GM's financial statements. GMFinan cial transfers receivables and lease-related assets to these SPEs, the SPEs issue notes, and use the cash collected from their transferred assets to pay principal and interest on the notes. Creditors of the SPEs have no recourse to the assets of GM Financial or General Motors. GM Financial has no obligation to provide additional financing to these SPEs At December 31,2016, the assets and liabilities rel ated to GM Financial's comsolidated SPEs are as follows (dollars in millions): $2,067 29,371 19,341 38,244 Restricted cash GM Financial long-term d GM Financial reports interest income and leased vehicle income on the securitized assets, and interest expense on the secured debt. It also records a provision for losses on the receivables Required Describe the process GM used in deciding to consolidate GM Financial's SPEs. What conditions must exist to lead to the conclusion that the SPEs should be consolidated? Why do you think GM decided that these SPEs should be consolidated? How does consolidation affect GM's December 31,2016, balance sheet accounts? a. b